For instance, this past February, the nation's largest Catholic health system, Ascension Health, partnered with the Stamford, CT–based private equity firm Oak Hill Capital Partners, embarking on a joint venture to buy Catholic hospitals.
Leo P. Brideau, FACHE, president and CEO of the St. Louis–based Ascension Health Care Network, says the joint venture allows the organization to provide an alternative funding source for the acquisition of Catholic healthcare entities. He notes that through this partnership, Ascension will be able to offer financial, clinical, and operational resources to the entities it acquires. The system currently operates 68 acute care hospitals in 20 states and the District of Columbia, and Oak Hill Capital Partners has over $8.2 billion in total capital, a portion of which the organization can draw upon.
Brideau explained that Ascension Health Care recognized that to stay competitive and provide quality care, it needed to transform its system from acute care to a population health management approach; that required capital Ascension didn't have.
"Hospitals needed to invest in their technology and their facility to stay current, and the traditional approaches to doing this just didn't suffice—they have to be more creative," he says. "Before partnering with Oak Capital, our capital was spoken for by the needs of our hospitals. So, bringing in another hospital—especially one that might have significant capital needs—just wasn't feasible."